Who Is Entitled to the End-of-Service Award?
Every employee who has completed at least two consecutive years with an employer is entitled to an end-of-service award, regardless of nationality or the business's activity. The one exception is an employee with under two years of service who resigns voluntarily without a statutorily recognized reason — in that specific case alone, no award is owed unless the employment contract states otherwise.
The Basic Calculation
The general calculation rests on two rules: half a month's wage for each of the first five years of service, then a full month's wage for every year after that. That's the textbook rule anyone can find by searching. What actually determines your real number is a set of details that shift the result significantly: which allowances count toward the calculation base, how partial years are treated, and how any breaks or renewals in your contract factor in. In our experience, most people who calculate their own entitlement using the general rule alone end up with a figure different from what they're actually owed.
The Resignation Scale Under Article 85
When the employee is the one ending the relationship, Article 85 of the Labor Law sets a clear scale: one-third of the award if service ran between two and five years, two-thirds if service exceeded five years but stayed under ten, and the full award if service reached ten years or more. But determining which bracket actually applies to you requires precisely establishing your real start and end dates — something we verify for every client before giving a final number.
Want your exact entitlement? Send us your start date, end date, and final salary on WhatsApp, and we'll get back to you with a precise figure within hours.
Is the Award Based on Basic Salary or Total Compensation?
The award is calculated on the employee's final wage, but determining which allowances are "fixed and regular" enough to count toward the calculation base, and which are variable and excluded, is where real disputes most often arise between employees and employers. Many businesses calculate the award on basic salary alone, overlooking allowances that should be included, and the employee often only discovers the difference after a precise review of their contract and actual pay slips.
A Special Exception for Marriage or Childbirth
The law grants female employees a special exception: if she ends her employment contract within six months of her marriage, or within three months of giving birth, she is entitled to the full end-of-service award regardless of her actual years of service — but this exception requires proving the contract's termination is genuinely tied to the marriage or birth, proof an employer may dispute if it isn't properly documented.
Deducting Debts and Advances From the Award
The employer may deduct any amounts owed by the employee from the award, provided these amounts are documented and clear. This deduction doesn't eliminate the employee's right to claim the difference if the deduction exceeds what's actually owed, and we help clients verify these calculations' accuracy before signing any final clearance — since signing after discovering an error makes a later claim much harder.
What If the Employer Refuses to Pay?
When an employer refuses or unjustifiably delays paying the owed award, the employee has the right to file a complaint through the electronic labor office platform — a mandatory first step before judicial escalation. If amicable settlement fails, we move with you to litigation before the competent labor court, where we handle establishing your years of service and actual wage with the necessary documents on your behalf. And if your contract's termination itself was unjustified, see our guide on unfair dismissal and how to prove it to assess your right to additional compensation.
End-of-Service Award vs. Social Insurance (GOSI)
Many employees confuse the end-of-service award with retirement entitlements from Social Insurance (GOSI), but these are two entirely separate systems, and an employee is entitled to both without one being deducted from the other.
The Award Upon an Employee's Death
If an employee passes away during their service, the full end-of-service award is paid without any reduction, and is added to their estate for distribution to legal heirs under inheritance and estate rules.
How We Help With This File
We review your contract, salary records, and the actual circumstances of your termination, usually within one business day, giving you a precise calculation of your entitlements before any step. From our experience, the most common mistake is signing the final clearance without first verifying the calculation's accuracy — a step that's hard to reverse later even if the amount paid turns out to be less than what's actually owed. Reach out on WhatsApp before signing any final document.
Frequently Asked Questions
Is the award calculated on the last salary or an average of salaries?
It's calculated based on the employee's last basic wage plus regular fixed allowances, not on an average of past salaries or variable bonuses.
Does an employee get the full award in cases of unfair dismissal?
Yes, in unfair dismissal cases the employee is entitled to the full award regardless of years of service, in addition to entirely separate compensation for the unfair dismissal itself.
Does the award lapse if I resign before completing two years?
Yes, as a general rule, unless your employment contract states otherwise, or your resignation is tied to a statutorily recognized excuse such as a work injury or force majeure.
Can an employer delay paying the award for several months?
No, all entitlements must be paid within two weeks of the employment relationship's end, and the employee has the right to formally claim if the delay exceeds this period.